If you go to wikipedia there is a full explaination there. Basically, standby and sleep are the same, the computer closes down apart from ram required to restore it to an active state When in hibernation things are written to non volititle storeage in ram so the computer can get back to a live state quickly. In none of these things does the pc power off completely.

Hibernate - Save state & shut down.
Sleep/Stand by - power down the not required hardware, it's not a complete shut down which means components still use power. Not recommended in case of notebooks 'coz it might run out of battery & shut down, thereby you losing all your unsaved work.

I always go to "sleep". I never shut the system down except for the required Restarts with certain updates. My system takes 5 minutes for a restart because it is so heavily loaded (179 installed programs, 4 virtual partitions, etc). It was interesting to see that my Windows 7 running in a virtual partition takes less than 2 minutes to restart. But then this is a quasi "naked" system with hardly anything on it.